I am an intern and received a 1099 for over $400. Right now it appears that I will have to pay the IRS around $800. As a student getting a stipend for an internship so I can pay my rent whose full income is less than $10,000 is there anything I can do to make this sum that is such a large portion of my income go down? I am not a small business, though that seems to be what the government is treating me as. Upon first glance there are many things small businesses are allowed to deduct that I can't because I'm not actually one. What can I do?
In my opinion you should get the internship provider to issue the W-2 they should have given you in the first place. If the employer refuses, file Form 4852, Substitute for Form W-2, Wage and Tax Statement ..., with your tax return. That won't save you but about $30. Keep in mind that you will be burning your bridges with that employer if you follow the above course of action. So, if you want to eat the $30, consider filing a CONFIDENTIAL complaint with your college/ university's internship coordinator.
What exactly is the amount of the 1099-MISC box 7? "Over $400" could be a lot or a little. The previous reply, I think, assumed your self-employment revenue was just about $400, while I think you mentioned that number because that is the net self-employment profit subject to SE tax.
Assuming you are
not claimable as a dependent
not married
have no dependents of your own
leaving out education-related tax benefits
leaving out other credits typically not available to those who are students or under age 25 (such as EIC and retirement savings credit)
the first $8,950 of your adjusted gross income is income tax-free. After subtracting that, your federal tax bill for your tax bracket (the lowest) would be roughly:
10% of (wages minus adjustment for 1/2 self-employment tax) plus 25.3% of stipend (self-employment income).
I don't see how this could equal $800 if your "full income" is less than $10K. (Yes, I'm oversimplifying, but trying to get some ballpark reality check here).
You are either screwing up your tax calculation big-time, or there's more to your story. It's not at all clear that you either owe what you think you owe, or that if you do, it's because of a $400 stipend.
Or put another way, what would you "appear" to owe without the stipend?
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